FinMin hopeful of getting DTC Bill passed in April 2012

The Finance Ministry today said it is hopeful of getting the Direct Taxes Code (DTC) bill approved by Parliament in the next fiscal to enable its implementation from April 1, 2012.

"The draft DTC is with the Parliamentary Standing Committee. It is likely that by February-March, we should receive their comment and by the middle of next year in the monsoon session, it should be voted and made law," Revenue Secretary Sunil Mitra told reporters on the sidelines of a FICCI conference here.

In August, the government decided to delay the implementation of DTC by a year to April 1, 2012.

The DTC, which seeks to replace the Income Tax Act 1961 and simplify direct tax laws, was originally proposed to be implemented from April 1, 2011.

"In the event of the Standing Committee giving its report, our effort will be to do it (get the bill passed) at the earliest. Until it is passed, we cannot bring the subordinate legislation," Mitra said.

"Sooner it (the bill is passed) happens, the more time we will have for the sub-ordinate legilation...," he added.

After criticism by various quarters, the government had dropped its earlier proposals on taxing long-term savings like provident funds and imposing minimum alternate tax (MAT) on gross assets of companies.

The government would lose about Rs 53,000 crore in tax revenue on account of the increase in exemption limits and tweaking of slabs in the Direct Taxes Code bill.

The delayed implementation of the DTC, which is a replacement of Income Tax Act 1961 would give corporates and individuals enough time to get ready for the switchover.

As per the bill, income of Rs 2-5 lakh would be taxed at 10 per cent; Rs 5-10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent.